Question

Flynn Company's monthly bank statement showed the ending balance of cash of $18,500. The bank reconciliation for the period showed an adjustment for a deposit in transit of $1,500, outstanding checks of $2,000, a NSF check of $700, bank service charges of $30 and the EFT from a customer in payment of the customer's account of $1,500. Use the information above to answer the following question. What journal entry should be recorded by Flynn Company for the EFT

Answer 1

Flynn Company

Journal Entry

Account Titles Debit Credit

Cash $1,500

Accounts Receivable $1,500

To record the direct credit through EFT on account.

Step-by-step explanation:

a) Data and Analysis:

Ending balance according to bank statement = $18,500

Bank reconciliation adjustment for:

Deposit in transit = $1,500

Outstanding checks = $2,000

NSF check = $700

Bank Charges = $30

EFT (Electronic Fund Transfer) = $1,500

Analysis:

Cash $1,500 Accounts Receivable $1,500